Some Simple Economics of Crowdfunding

@article{Agrawal2014SomeSE,
  title={Some Simple Economics of Crowdfunding},
  author={Ajay Agrawal and Christian Catalini and Avi Goldfarb},
  journal={Innovation Policy and the Economy},
  year={2014},
  volume={14},
  pages={63 - 97}
}
It is not surprising that the financing of early-stage creative projects and ventures is typically geographically localized since these types of funding decisions are usually predicated on personal relationships and due diligence requiring face-to-face interactions in response to high levels of risk, uncertainty, and information asymmetry. So, to economists, the recent rise of crowdfunding—raising capital from many people through an online platform—which offers little opportunity for careful… Expand

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